Affordable housing guidance and tenure mixes explained
The percentage comes from the local plan, the tenure split and unit mix from a supplementary document. How to read all three and what the section 106 has to say.
The tenure split applied to a site comes from the local plan policy, with the detail filled in by an affordable housing supplementary planning document. Reading an affordable housing spd tenure requirement properly means separating three things: the percentage of affordable homes required, the split between rented and ownership tenures within that percentage, and the mix of unit sizes within each tenure. Councils set all three, and they are not negotiated in the same way.
Get the policy reading right before the layout is fixed. A tenure split discovered at month four usually means redrawing the scheme.
Where the requirement is actually set
Three documents, in descending order of weight.
The adopted local plan sets the policy: the site size threshold, the percentage, and often the broad tenure expectation. It carries full weight under section 38(6) of the Planning and Compulsory Purchase Act 2004.
A supplementary planning document adds detail: the tenure split, unit size mixes, standards for the affordable homes, the approach to off-site provision and payments in lieu, and the council's preferred section 106 drafting. It is a material consideration rather than part of the development plan, so it carries less weight than the plan, and a departure from it is easier to justify than a departure from policy.
A neighbourhood plan can also carry affordable housing policy, and where it is made it forms part of the development plan. Our note on checking whether a neighbourhood plan covers your site is the first check to run.
National policy sits behind all of it. The National Planning Policy Framework in force is the edition published on 17 August 2026, and the definitions of the affordable tenures are in its annex. Cite the policy code and the edition.
Site size thresholds and how they are measured
National policy has not sought affordable housing contributions from major developments below the threshold of 10 homes or 1,000 square metres of floorspace, with lower thresholds available in designated rural areas, where authorities may apply a threshold of five units or fewer. Rural exception sites operate under their own policy.
The measurement questions that cause disputes:
- whether the count is gross or net of existing dwellings being demolished
- whether a scheme of nine houses plus an annexe is nine units or ten
- whether floorspace is gross internal or gross external
- whether a site brought forward in phases is assessed as one scheme
Councils look through artificial subdivision. A site split into two applications of nine units each, by the same applicant, with a shared access, will be treated as one scheme on the question of whether the threshold is engaged.
Vacant Building Credit is worth knowing about. Where a vacant building is brought back into use or demolished for redevelopment, national guidance provides for a credit equivalent to the existing floorspace to be set against the affordable housing requirement, subject to conditions about the building having been vacant and not abandoned.
Tenure splits and unit mixes
A typical supplementary planning document expresses the split as a proportion of the affordable homes, for example a majority as affordable housing for rent with the balance as affordable home ownership. The rented element may be further split between social rent and affordable rent, and councils with their own housing stock or a preferred registered provider often have strong views about which.
National policy has expected at least 10 per cent of the total number of homes on major sites to be available for affordable home ownership, subject to listed exemptions. Verify the current wording, because this provision has moved between editions of the Framework.
First Homes sit within the ownership element. The policy requires a proportion of affordable housing secured through developer contributions to be First Homes, with a minimum discount to market value and a price cap after discount that is higher in Greater London than elsewhere. The figures are set nationally and have been revised, so check the current guidance rather than a figure in an older report.
Unit size mix is the part applicants most often overlook. A policy requiring a given proportion of three bedroom affordable rented homes constrains the layout, because those units need the right plot depth, parking and garden. Read the mix requirement at concept stage.
On-site, off-site and payments in lieu
National policy expects affordable housing to be provided on site unless off-site provision or a financial contribution of broadly equivalent value can be justified by evidence, and unless the agreed approach contributes to the objective of creating mixed and balanced communities.
The practical hierarchy councils apply:
- On-site provision, tenure blind in appearance and distributed through the scheme rather than clustered.
- Off-site provision on an alternative site in the same area, secured by obligation.
- A commuted payment, calculated by the council's own formula.
Commuted sum formulae vary widely and are usually set out in the supplementary planning document. Where a formula exists, run it early: the number is sometimes larger than the cost of on-site delivery, which changes the development appraisal.
Registered provider interest is the constraint nobody writes into policy. A scheme of six affordable units scattered across a site may be unattractive to any provider, and a council that insists on dispersal while no provider will take the homes has created a deliverability problem rather than a policy outcome. Raise it early and in writing.
Evidence needed to depart from the policy
Two routes. Argue that the policy does not apply on its terms, which is a legal and factual argument about thresholds, definitions and credits. Or argue that the scheme cannot viably deliver the policy requirement.
The viability route follows the Planning Practice Guidance on viability, which starts from the position that the plan has already tested viability at a strategic level, so the burden on the applicant is to show what has changed or what is site specific. A Viability Assessment needs the land value benchmark, the gross development value, the build costs with their source, the finance assumptions and the return, with the inputs transparent enough for the council's own consultant to test. Councils usually expect a suitably qualified author and professional review is strongly advised.
Expect a review mechanism. Where a reduced provision is accepted on viability grounds, councils commonly secure a late stage review in the section 106 agreement, requiring the actual values to be tested on completion with an additional contribution if the scheme performs better than forecast.
An Affordable Housing Statement should set out the policy requirement, what is proposed, the tenure split, the unit schedule by tenure and size, and the delivery mechanism. Put the comparison in a table, because that is the first thing the housing officer looks for.
Drafting the obligation to match the policy
The section 106 agreement is where the policy becomes enforceable, and mismatches between the statement and the deed are common.
Points to settle before drafting:
- the definition of each tenure, tied to the Framework definitions rather than to local shorthand
- the trigger for transfer to a registered provider, and what happens if no provider contracts
- the mortgagee exclusion clause, which lenders require and which councils limit
- occupancy restrictions and any local connection criteria, with the cascade if nobody qualifies
- phasing: how many market units may be occupied before the affordable units are delivered
- the review mechanism, its inputs and its cap
Monitoring fees are charged by most authorities, and our note on section 106 monitoring fees and what they cover explains what is properly chargeable. Where you want to understand what the authority did with earlier contributions, the infrastructure funding statement is the published record.
This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it.
PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.
Frequently asked questions
Does a supplementary planning document carry the same weight as the local plan?
No. A supplementary planning document is a material consideration rather than part of the development plan, so it carries less weight than an adopted policy under section 38(6) of the Planning and Compulsory Purchase Act 2004. Departing from it is easier to justify than departing from the plan policy it supports.
What is the affordable housing threshold?
National policy has not sought contributions from developments below 10 homes or 1,000 square metres of floorspace, with lower thresholds available in designated rural areas where authorities may apply a figure of five units or fewer. Rural exception sites operate under separate policy. Check the current edition of the Framework for the wording.
Can I pay a commuted sum instead of building affordable homes?
Only where off-site provision or a contribution of broadly equivalent value can be justified by evidence and the approach still contributes to mixed and balanced communities. Most councils publish a formula in their supplementary guidance. Run that formula early, because the sum is sometimes larger than the cost of delivering the homes on site.
What is Vacant Building Credit?
A national provision allowing a credit equivalent to the floorspace of a vacant building to be set against the affordable housing requirement where that building is brought back into use or demolished for redevelopment. Conditions apply about the building having been vacant rather than abandoned, so evidence of the vacancy is needed.
What is a late stage review in a section 106 agreement?
A mechanism requiring the scheme's actual values and costs to be tested at or near completion where reduced affordable provision was accepted on viability grounds. If the scheme performs better than forecast, an additional contribution becomes payable. Negotiate the inputs, the timing and any cap at the same time as the provision itself.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.